Donations and advertisements

[PFirelight]

I've been looking through the topics but I still have a question about the whole donation and advertisement aspect of a petsite. For donations, if you went through say paypal, wouldn't you need to register your petsite as a business, (same with advertisements.) And if your site is registered as a business wouldn't you have to fill out taxes for the income and expense of the petsite with the government? Or does that not follow over to petsite realted businesses? (I'm only calling it a business because it would have an income and an output of funds. which for what I understand about that would be labled as a small business)

[cpvr]

Yes, if your site is registered as a business - then you'll have to fill out taxes for the income. Not sure about the expenses though.

[PFirelight]

That really wasn't my question. I was more asking along the lines if all petsites do that or what's the norm for that? I was just stating what I know about that.

[cpvr]

Ya, most pet sites have advertisements, but I'm not sure about donations.

[Patrick]

You don't need to be a registered business to accept donations. You can be a sole proprietor.

[PFirelight]

yes, but do they register as small businesses though. Since they use the advertisements to help pay for bandwidth and all.

[PFirelight]

Thank you Patrick ^^

[Ian]

depends on what country but most pet sites probably wouldn't have to pay much tax because they don't make enough money for it to have to pay income tax

thats for the UK anyway. If you make less than £6,000 a year I think you don't pay income tax

17.5% of all marapets income goes into VAT

for for a £10 account upgrade, 17.5% goes straight on tax (kinda like sales tax)

and then if we make a profit at the end of the year we pay tax on profits

they aren't "donations" because we are not a charity

[PFirelight]

since you have gone through both paypal and now a new one (google was it? I appologize if that's wrong) does it automatically take out the taxes nessessary?(other then the end of the year ones)

[Patrick]

Paypal takes their own percentage but its not a lot. You have to file income tax. In the US its something like over $600 you have to pay taxes on it. Anyway, either way you should get a CPA.

[SilveradoHD]

From what I understand and have read, if you earn more than $400 from self employment you have to file a Federal Income Tax Return.

[Lunarflight]

But that's for earnings after expenses right?

So if expenses counteract earnings (including upkeep of the site and paying employees, etc) so that you're under the four hundred (or whatever it is where ever it is), there's no need to report?

[Patrick]

No, its not earnings after expense.

If you make $600 though, and you spent $600 on the "business", your taxes will basically be $0. You still gotta report it.

[PFirelight]

.. but you just didn't make any sence.. You say not earnings after expence but then you said 0$..... so if there was 600 made and 500 spent then 100 would be reported.... or are you saying that you report both 600 made and 600 spent?

[Patrick]

huh?

I was trying to explain tax write offs. Your allowed to write off expenses so you don't need to pay money on that income.